FleetCor(FLT) - 2022 Q4 - Annual Report

Financial Performance - Total revenues for 2022 were $3,427 million, an increase of 21% from $2,834 million in 2021[82] - Net income for 2022 was $954 million, reflecting a 13.7% increase compared to $839 million in 2021[95] - Consolidated revenues for 2022 were $3,427 million, an increase from $2,834 million in 2021, reflecting a growth of approximately 20.9%[120] - Net income for 2022 was $954.3 million, an increase of 13.7% from $839.5 million in 2021[192] - The company’s total comprehensive income for 2022 was $909.3 million, compared to $738.0 million in 2021[192] Revenue Sources - Corporate Payments revenues increased by 28.7% to $772.4 million in 2022, with operating income rising by 29.3% to $255.4 million[97] - Brazil revenues reached $442.2 million in 2022, a 20.1% increase from the previous year, with operating income growing by 13.2% to $174.7 million[98] - Lodging revenues reached $456.5 million in 2022, marking a 47.4% increase compared to the previous year, driven by higher transaction volumes and acquisitions[126] - Other revenues were $251.0 million in 2022, a 6.4% increase year-over-year, driven by organic growth and increased transaction volumes[127] - Revenues from international businesses accounted for 38.9% of total revenues in 2022, up from 37.0% in 2021[175] Acquisitions and Investments - The acquisition of Roomex for approximately $56.8 million was completed on November 1, 2022, expanding the company's presence in the U.K. and German markets[88] - The company completed over 95 acquisitions since 2002, indicating a strong focus on growth through strategic acquisitions[117] - The company acquired a European-based vehicle maintenance provider and a cloud-based EV charging software platform in February 2023 for an immaterial amount[118] - The company made strategic investments totaling $19.1 million in various EV-related businesses in 2022[88] Expenses and Liabilities - Depreciation and amortization expenses increased by 13.4% to $322.3 million in 2022, primarily due to acquisition-related expenses[94] - Selling expenses increased by 17.9% to $309.1 million in 2022, primarily due to higher marketing costs and expenses related to acquisitions[122] - The company incurred additional interest expense of $10.6 million in 2022 due to interest rate swap contracts tied to variable rate debt[123] - The company’s total current liabilities increased to $6,043.5 million in 2022 from $5,290.4 million in 2021[188] - The company had $5.8 billion of variable rate debt outstanding as of December 31, 2022, up from $4.9 billion in 2021, reflecting an increase of approximately 18.4%[206] Currency and Interest Rate Impact - The company estimates a positive impact of approximately $96 million on consolidated revenue for 2022 due to favorable fuel prices and spreads, partially offset by a $47 million negative impact from foreign exchange rates[92] - Fuel prices directly impacted approximately 13% of revenues in 2022, compared to 12% in 2021[87] - The impact of fuel prices on revenues was approximately $141 million in 2022, contributing to about 6% of net revenues[117] - The company experienced foreign currency translation losses of $77.1 million in 2022, compared to losses of $144.5 million in 2021[192] - A hypothetical 10% change in foreign currency exchange rates could have impacted consolidated operating income by approximately $68.4 million in 2022[175] Shareholder Actions - The company repurchased 26,280,908 shares for a total of $5.9 billion since the start of the stock repurchase program, with $1.2 billion remaining for future repurchases[171] - The stock repurchase program was increased to $7.1 billion as of October 25, 2022[171] Operational Insights - Approximately 61% of the company's revenue in 2022 was derived in U.S. dollars, minimizing the impact of foreign currency exchange rates[87] - The company’s payment solutions focus on specific commercial spend categories, including Fuel, Corporate Payments, Tolls, and Lodging[132] - The company’s cross-border payments business includes revenue from currency exchanges at spot rates, enabling cross-currency payments[133] - Approximately 91% of outstanding accounts receivable were current as of December 31, 2022, compared to 96% in 2021, indicating a decline in receivables quality[202] Financial Management - The company has entered into interest rate swap contracts with notional values totaling $2.0 billion to reduce cash flow variability associated with variable rate debt[160] - The effective interest rate incurred on the term loans was 3.41% during 2022[158] - The company utilizes interest rate swap contracts with notional amounts totaling $2 billion to mitigate exposure to rising interest rates[206] - The company classified $215.8 million as restricted cash due to current capital market conditions as of December 31, 2022[138] - The company made principal payments of $2.8 billion on term loans and $6.5 billion on revolving facilities during 2022[159] Asset Management - The company recognized revenue for stored value cards at the point in time when control passes to the customer, generally upon shipment[134] - The company evaluates indefinite-lived intangible assets for impairment annually, with significant estimates including discount rates and projected revenue growth[205] - Share-based compensation expense for 2022 was $121,416, compared to $80,071 in 2021, marking an increase of approximately 51.6%[194] - Other comprehensive loss from currency exchange for 2022 was $(45,034), a decrease from $(101,458) in 2021, indicating an improvement of about 55.7%[194]